Chapter 13: "Other" Civil Law Legal Aid Services
The imposition of a cap on legal aid funding has resulted in an increase in the number of people who are ineligible for legal aid in relation to a growing list of civil law matters that fall outside the mandate and resources of the clinic system. In some instances, these legal issues may have a serious impact on an individual and may be legally complex.
A number of possible options outside the traditional legal aid system are available to expand access to justice in civil law areas currently not covered by it. However, even if all of these tools are put in place, we do not believe that all of the most significant legal needs of low-income Ontarians in relation to civil law matters will be met. We are of the view that the legal aid authority should revisit the range of civil cases that historically had coverage under the Plan, and should reassess whether or not coverage should be provided to individuals in some or all matters, in light of our articulated approach to how priorities should be set where resources are limited.
This chapter describes client needs, case coverage, and existing delivery methods for "other" civil law matters. It also briefly describes additional methods for expanding legal assistance in relation to these matters, both within and outside the legal aid system.
THE ONTARIO CONTEXT
Client needs in relation to "other" civil law matters, not falling within the "poverty law" mandate described in chapter 11, vary widely. For example, consumer, utility, and debt problems have been consistently identified in the major U.S. surveys as matters of great importance to low-income people. Vulnerable elderly persons can have serious legal issues when their powers of attorneys are misused; mothers of young children who face life- threatening illnesses can have urgent needs in the areas of wills and other planning for their children. Persons injured in accidents, medical malpractice, or assaults can have legal issues arising from these events.
As well, low-income people have problems with tax credits and related issues. Marginalized workers can have serious problems understanding their rights and obligations in employment situations. Many workers, because of prohibitively expensive legal fees, do not have the means to review a dismissal by their past employers. Aboriginal organizations identified "other" civil law issues of serious importance to their community, such as small claims matters in the area of purchases of consumer durables.
Over the past few years, certificate coverage has been eliminated for most civil law matters. For example, in September 1994, the terms of the Memorandum of Understanding (MOU) contemplated the reduction in civil law coverage by providing that
- certificates for plaintiffs in most personal injury claims will be issued to cover disbursements only except for Ontario Motorist Protection Plan mediation;
- certificates will not be issued to pursue or defend claims in relation to debt; and
- certificates will not be issued for claims concerning real estate except in very limited circumstances.
Further cuts to "civil litigation" certificates, which were approved by Convocation in August of 1995, eliminated legal services for wrongful dismissal cases and damage claims (with only disbursements still being paid). In addition, certificates are no longer available for coroners' inquests, public inquires and will drafting.
Currently, if civil certificates are issued, priority is given to civil cases involving sexual assault, mental health, disability benefits, parole or prison matters, and, where clinics are not available, "poverty law", such as workers' compensation, Social Assistance Review Board, and landlord and tenant matters. In practice, due to the reduced number of certificates issued as a result of the MOU, the Plan is granting fewer and fewer certificates in these areas. In communities where no community legal clinic exists, the reduced coverage has had, of course, an even greater impact.
Table 13-1 outlines the number and cost of "other" civil cases for the Plan for the year ending March 31, 1996.
Table 13-1: Analysis of Completed Civil Law Cases, 1995-1996
|Type of Aid||Number of Cases||Total Fees and Disbursements||Average Cost|
|1996||1995||1996 ($)||1995 ($)||1996 ($)||1995 ($)|
THE CURRENT DELIVERY SYSTEM
The reduction in legal aid coverage in the area of civil law has resulted, in some instances, in private lawyers agreeing to take cases on a speculative basis, hoping to recover fees from a judgment or settlement. Other lawyers are providing services in some cases based on extended repayment schedules to cover fees and disbursements. There is also some indication of increased pro bono work, and flexible techniques being used by the private bar, such as agreeing to perform a limited part of the service, with the client doing the rest.
Community clinics have also tried to respond to the reduction in civil law certificates, but are generally finding that they do not have the resources, in most circumstances, to provide much more than summary advice. In a number of communities across Ontario, however, there are no community clinics in place to offer assistance, in light of the reduction in the issuance of certificates in non-family civil matters.
The matters upon which some clinics provide summary advice include: employment standards and employee rights; wrongful dismissal; consumer claims; and wills and estates. Some clinics support self-representation by providing self-help kits for Small Claims Court and wrongful dismissal actions, and by providing some assistance in filling out forms (e.g., they may assist clients to complete a statement of defence to avoid a default judgment being entered against him or her). They also provide referrals to the private bar, the Lawyer Referral Service, Dial-a-Law, and duty counsel advice clinics. Student clinics represent individuals on consumer- and employment-related issues, and most student legal clinics provide representation in Small Claims Court.
Yet, for many potential clients, assistance from lawyers or community or student clinics is not available. As a result, individuals are increasingly attempting to represent themselves in court and before administrative tribunals. As with other areas of law, this has resulted in a higher demand on court and administrative tribunal resources because most unrepresented clients are neither able to work their way through complex court rules and procedures, nor able to navigate processes in the courtroom.
OPTIONS TO IMPROVE ACCESS TO JUSTICE FOR OTHER CIVIL LAW MATTERS
In light of the ever-growing list of unmet civil law needs, it is incumbent upon the legal aid authority, the government, and the Law Society to consider mechanisms to increase access to legal assistance for these kinds of cases. In particular, this issue must be considered by the legal aid authority in light of other delivery-model reforms and its mandate to set priorities based on the impact the matter has for the individual rather than by predetermined categories.
For instance, one could easily envision the legal aid authority applying its intake assessment and priority-setting function to "other" civil law cases. In such circumstances, the Area Office could determine financial eligibility and, based on the issues raised by the case and the individual circumstances of the client, determine whether the issue is a priority for legal aid and, if so, how the legal need could be met using a range of delivery options. Possible options include:
- private bar (possibly through a referral for a contingency-fee arrangement, with intake officers providing advice on the proposed arrangement to protect vulnerable clients; perhaps through the lawyer referral program; or maybe on a certificate);
- contingent legal aid fund (administered by the legal aid authority or another body: see description below); community clinic (where summary advice, or public legal education or representation may be available); duty counsel advice clinic (possibly within the intake office, where summary advice, help with forms, and possibly some representation in straightforward matters that fall outside of the "poverty law" areas covered by the clinics could be offered); and
- public legal education and self-help kits.
If, however, the legal aid authority, because of other legal case priorities, is unable to resume services in this area, it should work with the Law Society, the provincial government, and the bar associations to promote alternative options enhancing services in this area.
The following section sets out possible methods of improving access to justice in "other" civil law matters.
Traditionally, lawyers are remunerated for their services in civil actions at an hourly rate which is payable to the lawyer whether or not the action succeeds. Under a contingency-fee arrangement, a lawyer accepts a client's case on the basis that the lawyer is paid only if the case is successful. The lawyer bears the risk of not being paid for the litigation in return for a share of the client's settlement or court award if the case is won, although the client bears the risk of having to pay the other side's costs if the case is lost.
There are three types of contingency-fee arrangements:
- Speculative Fees: These are pure "no win, no fee" arrangements, where payment is conditional upon winning the case.
- Conditional Fees: A successful lawyer receives fees enhanced by an "uplift" percentage higher than the regular rate. This is the system used in England for a limited number of suits, and in Ontario for class actions only.
- Contingency Fees: A successful lawyer gets a percentage of the plaintiff's damage award. This is the dominant U.S. model, and is also used in British Columbia, among other Canadian jurisdictions. The award may be a fixed percentage, or a series of increasing or decreasing percentages, depending on the final damage award and the stage at which the dispute is resolved. Such tiers may be set by statute or regulation, and may differ according to the kind of claim.
Contingency-fee arrangements are of practical value only where a plaintiff is claiming monetary relief and where the amount in issue is large enough to cover the fees and leave a return for the client. Such arrangements have the potential to improve access to legal representation in a small number of civil matters for which legal aid is no longer generally available. These matters include wrongful dismissal, personal injury, medical malpractice, some consumer litigation, real estate, and estates matters.
Contingency-fee arrangements have recently been permitted in England and Wales. They are limited to personal injury, fatal accidents, insolvency, and cases before the European Commission and the Court of Human Rights. Lawyers may charge an increase in their fees, up to a maximum of 100 percent, based on the chance of winning. The success fee and other details of the contingency arrangement must be specified at the outset. The lawyer must also outline the risks of litigation to the client.
The English scheme differs from the standard U.S. model in one regard. Under the English conditional-fee arrangement, the amount a lawyer receives is not related to the total damages awarded to the client. Instead, the lawyer receives the increased hourly amount only if the case is successful.
Contingency fees are allowed throughout the United States and in every Canadian province except Ontario, where they are prohibited by the Solicitors Act and the Champerty Act. The Law Society and the Canadian Bar Association are both in favour of allowing contingency fees for all proceedings, except family and criminal. However, even in Ontario, much civil litigation is, in fact, conducted on an unofficial contingent-fee basis, that is, a substantial fee in the event of success, only disbursements in the event of failure.
A limited form of contingency fee is permitted in Ontario under the 1992 Class Proceedings Act, which allows lawyers acting on behalf of plaintiffs in class actions to enter into written agreements with their clients for payment only in the event of success. These arrangements must be approved by the court. This arrangement is similar to the English system, as successful lawyers do not receive a percentage of the award, but instead receive their fees, which are increased by a set multiplier.
However, one barrier to class proceedings providing legal services to low-income earners is found in the Ontario two-way-costs rule. Under that rule, the losing party must pay a substantial part of the winner's legal bills. While a contingency fee means that the client does not have to pay his or her lawyer in the event of a loss, it does not remove the obligation to pay the other side's costs.
To address the disincentives posed by the risks of burdensome costs being imposed upon a losing class-action representative plaintiff, Ontario established the Class Proceedings Fund. This fund provides financial assistance to plaintiffs who lose a class action and must pay the other side's costs. The Class Proceedings Committee approves applications based on such criteria such as public interest in the lawsuit. The scheme is intended to be self-funding, and it requires a successful plaintiff to pay back a percentage of his or her award into the fund.
Proponents of contingency fees argue that they enhance access to justice for certain groups, especially the working poor, who could not initiate litigation under an hourly-fee contract.
A recent empirical study comparing Ontario and British Columbian litigation experience by Professor Jacob Ziegel and Douglas Cumming, indicated that "lawyers are more willing to act for cost-averse or impecunious clients where contingency fees are explicitly permitted in the jurisdiction in which they are practising". They concluded that, as a result, it is likely that percentage contingency fee arrangements increase access to justice through private solicitors. Also they found that percentage contingency-fees generally reduced the minimum dollar value of the claims at which lawyers will take on clients.
While some critics of contingency-fee arrangements are concerned that contingent arrangements would encourage litigation, the Canadian "party and party" costs rule imposing the costs of the victorious party on the losing party is a deterrent to such frivolous cases. Moreover, lawyers are not likely to expend their efforts on unmeritorious actions when their fee is contingent upon success.
Further concern about contingent arrangements may arise in relation to situations where lawyers fail to disclose that the case is an easy win, requiring very limited legal services, or that it may be easily settled. In these circumstances, they can earn a large contingency fee for very little risk or effort. Safeguards should be put in place to reduce such occurrences.
CONTINGENCY LEGAL AID FUNDS (CLAF) AND MODIFIED CONTINGENCY LITIGATION ASSISTANCE
It is clear that the expense of litigation is one of the fundamental barriers to access to justice. The creation of a Contingency Legal Aid Fund (CLAF) is one way of enhancing legal assistance to low-income earners who would otherwise be deterred from litigation by the costs involved. It provides a means of supporting the legal costs of those with limited resources. It also could be an alternative to instituting province-wide contingency-fee arrangements. A CLAF could be set up under a scheme that is similar to the Class Proceedings Fund (described above).
The operation of a CLAF is quite straightforward. Litigants whose cases are accepted into the scheme and who have met the financial-eligibility criteria would have their legal costs, including the other side's lawyer fees if they lose their case, paid by the fund, but must agree to pay into the fund a proportion of damages recovered if they win. The administrators of the scheme would assess the merits of a case at the outset in a manner similar to the assessment of cases under the current legal aid system. If they decide that the case has a reasonable likelihood of success, the litigant's claim would be accepted into the scheme.
The creation of a CLAF improves access to legal representation in a small number of civil matters involving money claims, such as wrongful dismissal, personal injury, consumer and commercial litigation, real estate, and estate matters. Essentially, a CLAF is designed to avoid the need for litigants to pay their legal costs up front. Following the initial infusion of start-up capital, the surcharges imposed on damages recovered by successful litigants enable the system to operate on a self-funding basis.
CLAF schemes have been implemented in Hong Kong and various Australian states. The Supplementary Legal Aid Scheme (SLAS), as it is called in Hong Kong, has been in place since 1984. Applicants must pass a merits test which assesses the reasonableness of the claim, and a means test, which examines whether the applicant's financial situation meets eligibility criteria. If a claim is settled before trial, the successful plaintiff must pay 7.5 percent into the fund, and if the plaintiff wins at trial, 15 percent is paid to the fund. The SLAS covers monetary claims which have a good chance of success. It extends to personal injury cases; employee compensation claims; and medical, dental, and professional negligence claims.
In Australia, the states of Victoria, Western Australia, and South Australia make use of contingency-style litigation funds. In Victoria, the Attorney General granted money to a program which will launch the Law Aid Scheme, a contingency-funding arrangement, to be administered by the Law Institute and the bar. The Law Society in Western Australia currently operates a modified contingency litigation assistance fund, referred to as WALAF. A client who cannot afford to litigate a case approaches a lawyer, who applies to the fund, which underwrites the risk of an adverse-costs award. The successful plaintiff must remit 15 percent of the damages award to the fund. The successful lawyer works for a flat fee prenegotiated with the Legal Aid Board. This fee is usually slightly below market rates for the same legal service. Since 1991, the Southern Australian Law Society has operated a contingency-like Litigation Assistance Fund (SALAF), resembling that of Western Australia. By 1992, there were fewer applicants than expected: only 139, of whom 29 received funding. Barriers to the fund include the fixed legal fee for which the applying lawyers work, and a $1,000 application fee.
There are numerous ways to set up a CLAF or a modified contingency litigation assistance scheme, and various safeguards that can be put into place to avoid frivolous and protracted cases. First, a fairly stringent merits test is needed, and, second, a case- management scheme administered by the CLAF staff is required. With these two conditions in place, only cases with a reasonable prospect of success will proceed.
For a CLAF or other assistance scheme to be economically viable, a sufficient number of people with strong cases must apply to the scheme. One risk is that the majority of the people with strong cases will find lawyers who will take the cases outside the scheme, with the result that only those with borderline cases who do not want to risk paying high costs will be using the scheme. However, with an effective merits test in place, this is less likely to occur. Moreover, the availability of financial assistance in relation to disbursements will also assist in attracting meritorious claims.
PAYMENT OF DISBURSEMENTS ONLY
An increasing amount of public-interest litigation is being undertaken by established law firms, with only disbursements being paid by the client or by legal aid. In novel or speculative cases, it is often the expense of expert reports and disbursements associated with non-legal matters which adds substantially to the costs of litigating the issues. Although lawyers absorb the costs associated with their own time spent on the case, they often act out of a sense of personal or professional obligation to "give something back to the community", and may occasionally benefit from the publicity and valuable legal experience of litigating precedent-setting cases.
Law firms could be encouraged to "lend" associates on a rotating basis for defined periods of time to the various organizations involved in the delivery of legal aid services. In some cities in the United States, such as Chicago, large law firms have lent associates to legal services programs for periods of up to six months while continuing to pay the associates' salaries and benefits. The firm gains from the associates receiving valuable training and experience in the areas of client contact, client counselling, and courtroom performance. The legal aid authority benefits from both the donated legal work and the likelihood that the associates will maintain an ongoing volunteer connection with the program after their return to private practice. However, controls must be put in place to avoid a negative impact on the clients due to lack of continuity in service provider and lack of expertise in the relevant subject-matter.
Public-interest cases could also be an opportunity for law schools to form mutually beneficial relationships with large law firms by providing legal research support. In return, the students would receive valuable litigation training.
STUDENT AND SUPERVISED PARALEGAL INVOLVEMENT
Some of the U.S. state bars encourage law schools to maximize opportunities for law student participation in pro bono work by instituting mandatory pro bono work, requiring such service as a condition of graduation. At least ten schools nation-wide have done this. The mandatory obligation ranges from twenty to seventy hours annually, depending on the school. Whether the program is voluntary or mandatory, resources have to be committed to ensure appropriate case placement, supervision, and student evaluation.
Some civil law matters may be appropriately serviced by the support of supervised paralegals or students at the courthouse or administrative agency. For example, Professor Iain Ramsay, in the Ontario Law Reform Commission's Rethinking Civil Justice: Research Studies for the Civil Justice Review, suggested that earlier experiments with the use of duty counsel in small claims court should be extended. This could be a valuable experience for a student lawyer or an articling student. It would be particularly useful in urban courts which have significant levels of debt cases. He also argued that there should be greater opportunities for paralegals, law students, and clerks to provide legal advice in Small Claims Court. In Quebec, there is a paralegal advice service available in the court.
ASSISTED UNREPRESENTED AND PARTIALLY REPRESENTED LITIGANTS
As the number of unrepresented litigants in court increases dramatically, concern is growing about their inability to represent themselves. The overburdened justice system can and should take steps to assist these people in representing themselves more effectively. The following are some strategies which would allow at least some assistance to be provided to litigants who otherwise would be completely unrepresented, until other more substantial efforts to promote access to justice for the working poor are realized.
Expanded Use of Coaching
In California, an increasing number of legal services providers have begun to offer coaching to their disadvantaged clients as a low-cost substitute for full-scale representation. Legal services offices provide a lawyer who coaches a group of clients on how to represent themselves during a court proceeding or an administrative hearing. The clients, who are facing similar legal issues, such as eviction, attend a forum where applicable laws, court procedures, and legal forms are reviewed. After this session, the clients are on their own to represent their interests.
Coaching assistance can be effective in simple, uncontested cases. Although it would be preferable to have legal counsel, there are situations where self-assisted litigants can be successful if they are well informed. Unfortunately, when the opposing side has counsel, it will still be extremely challenging for the party appearing unrepresented to achieve a satisfactory outcome.
Expanded Use of Peer Counselling
The use of peer counselling has long been practised by Ontario's legal clinics in selected cases and carefully controlled circumstances as a means of stretching the resources for "poverty law" needs. In litigation, an organized teaching program for the client group is possible. This may be supplemented by a distribution of tasks among the group (filing, serving, research, planning, speaking roles), with a resource person remaining available for advice during the course of the proceedings.
Expanded Use of Unbundled Legal Services
Lawyers and clients now, more than in the past, often agree to divide responsibility for various legal preparation tasks needed to further the client's case. This has been formalized by some lawyers and clinics in Ontario. For example, some lawyers will agree that, if the client files and serves documents, the fee is reduced. Packages or kits designed by lawyers to assist lawyers providing "unbundled" legal services are available for purchase. Clients who have some degree of legal knowledge or related experience can also undertake factual research.
The more difficult and time-consuming the client tasks are, however, the greater the risk that clients' interests could be compromised. Ethical questions regarding the adequacy of support by the lawyer in cases of varying complexity readily arise.
PREPAID LEGAL SERVICES
Prepaid legal services plans involve the advance payment of fees or premiums in return for future legal services. They can be purchased by individuals from commercial providers, established by groups, or provided by an employer as an employment benefit.
Coverage provided by prepaid legal services plans varies widely, but tends to focus on summary legal advice, wills and estate administration, and home purchases and sales. More comprehensive plans may include coverage for family matters, representation in court or tribunals (but generally not major litigation), personal injury, consumer and debt matters, and, to a very limited extent, criminal matters. Many of the areas of law covered by prepaid services plans are not traditionally the areas of law which are identified by legal aid plans as a priority for clients.
The concept of prepaid legal services has not been widely implemented in Ontario and the rest of Canada, despite a reasonable degree of penetration in the United States. In the 1970s and 1980s, prepaid legal services plans were regarded as a potential means of enhancing access to the justice system for middle- and lower-income earners. The primary obstacles to the use of prepaid legal services plans have been low public and union demand, uncertain treatment by insurance regulators, unfavourable taxation status, and, at one time, opposition by the legal profession.
Despite the above-mentioned reservations, a few prepaid legal services plans have been offered by employers in Ontario. The largest plan is operated by the Canadian Auto Workers and was set up in 1985. It covers approximately 200,000 people across Canada, including CAW members, their spouses, and their dependants. There are a handful of other smaller union/employer plans. Entrepreneurs and insurance companies have entered the prepaid-legal-services market with limited success, but the general public remains largely unfamiliar with the concept.
Prepaid plans offer limited scope for enhancing access to legal services for the low-income earner because potential legal clients rarely have the funds to buy individual plans and are not likely to be covered by an employment plan. However, once legal aid is structured as we envisage, there may be the potential for the legal aid authority to work with prepaid-legal-plan providers to improve access to a limited range of legal services either through public legal education about available schemes or by actually participating in service delivery under a prepaid plan.
- The Ontario government should introduce legislation that allows for regulated contingent-fee arrangements for lawyers in Ontario.
- The legal aid authority should coordinate efforts with its justice–system partners to establish a Contingency Legal Aid Fund for low-income Ontarians.
- The legal aid authority should revisit the range of civil cases that historically had coverage under the Plan, and should reassess whether or not coverage should be provided to people in some or all of the matters in light of our articulated priority-setting considerations and managed-intake proposals.